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Beltone signs merger deal with Pioneers

Cairo, March 14, 2010

Egypt's Beltone Financial has signed a deal to complete its planned merger with Pioneers Holding, Beltone said on Sunday.

The merger is expected to be concluded by the end of May.

A Beltone spokesman said the new firm will be called Beltone Holding with Beltone's chief executive, Aladdin Saba, to be its managing director and the final agreement was concluded last week.

When first announced in November the all-share merger, which is structured as a takeover by Pioneers of Beltone, valued Beltone at 706 million Egyptian pounds ($129 million) but is now worth just under 500 million pounds, according to the Pioneers share price on Sunday.   

Under the deal Pioneers will issue 100 million new shares for Beltone shares which will give Beltone's owners a stake of about 17 percent in the merged firm.

The combined company's board will include Pioneers executives Walid Zaki and Taha Al-Telbani, Beltone's Saba and Aly El-Tahry and three members appointed by both parties.

Pioneers' shares jumped sharply after the news, and were trading 3.6 percent higher at 4.92 pounds by 1129 GMT on Sunday, while the main Cairo index was down 1.8 percent.   

Ashraf Akhnoukh, a trader with CIBC brokerage, said retail investors bought on the news, pushing volumes to the daily average by two hours into the session.

"This is normal procedure. They are still awaiting the due diligence on both companies," Akhnoukh said. "This does not mean the deal is done. The final verdict is due in May, this is when Pioneers should be up."    

Beltone specialises in investment banking, while Pioneers has a wide retail distribution network with smaller research and investment banking operations.   

The merger was initially expected to complete within six to eight weeks after the November announcement. - Reuters




Tags: Egypt | Pioneers | Beltone |

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